Why property investors have set their sights on Far North Queensland

Rainforest, reef, beaches, a cafe culture, fine wine and dining, and a laidback lifestyle – what’s not to love about tropical north Queensland?

With so many southerners moving up in search of a post-pandemic sea change, investors aren’t far behind.

And the returns are good, and only getting better, say local agents.

“Our prices are still low compared to other cities, but our rents are incredible, and there’s a very low vacancy rate,” says Nicholas Slatyer, principal of Belle Property Cairns.

“There are around 20-plus applications for most places that come up; they’re very over-subscribed.

“A lot of investors now are looking at lifestyle properties, beachside or hillside, as that’s currently where there’s the most demand, rather than for units, which everyone wanted pre-GFC.

Units, though, a few kilometres from the CBD, are pretty much selling for not much more than they were a few years ago, and body corporate fees are being reduced as a result of the government’s $10 billion cyclone reinsurance pool.”

Consider a house on 1600 square metres of beachfront land for $2 million, a two-bedroom apartment on The Esplanade for $525,000, or a four-bedroom house further north in Port Douglas, close to Four Mile Beach, at $930,000?

With the median price of a house in Cairns sitting at just $491,000, up 11.6 per cent on last year, and the median for a two-bedroom house in Port Douglas at $825,000 or a three-bedroom for $775,000, they compare pretty favourably with many other regions.

Rents, too, have risen dramatically according to the latest Domain figures.

The median weekly rent for a house in Cairns is now $520, up 13 per cent on last year, representing a yield of 5.6 per cent.

The Douglas Shire has a median rent of $495, up 20.7 per cent on 2021, with the same yield.

While COVID-19 decimated the tourism industry in Port Douglas, investors from Melbourne and Sydney still bought property, often sight-unseen, says Phil Holloway, principal of Century 21 Port Douglas.

“Now, they’re flooding here and, for the first time in my 35 years here, we’re experiencing a shortage of listings,” he says.

“But we don’t have enough permanent rentals either. With tourism picking up now, restaurants are looking for staff, then looking for accommodation to house them, and there are lots of people wanting to rent here to work remotely. Rents are going up all the time. This is the time to buy here.”

There are few new apartment complexes or housing estates being planned around the tropical north, so these kinds of prices and rents are here to stay, believes Tom Quaid, residential sales manager at Quaid Real Estate.

“The yields are strong – you can buy a house for $400,000 and rent it out at $500 a week,” he says.

“We’re starting to see a lot of investor inquiry now because they’re being priced out of other markets and will be chasing yields more and, with interest rates rising, they’ll be looking for cash flow.

“Some people are choosing to buy properties at between $300,000 to $600,000 – or two of them – for the yields, rather than more expensive homes with lower yields.”